Bulgaria's Black Sea city of Burgas has met with excitement the decision of the central government to scrap the Burgas-Alexandroupolis oil pipeline, a Bulgarian-Greek-Russian project.

Bulgaria's Borisov Cabinet decided Wednesday to back out of the pipeline for financial reasons, thus effectively killing the project.

"Today's decision of the government means a celebration for us!" commented Burgas Mayor Dimitar Nikolov, a well-known opponent of the project for transporting oil from the Black Sea to the Mediterranean via Port Burgas.

"I thank Prime Minister Boyko Borisov and the government for placing the interests of the nation and the Burgas region above anything else. I realize that their decision was not easy at all because of the enormous economic interests involved with the project," Nikolov noted, as cited by CROSS.

The population of the Burgas District, the projected location of the oil pipe on Bulgarian territory, has been vigorously opposed to the Burgas-Alexandroupolis oil pipeline project out of environmental fears.

As Bulgaria's Southern Black coast with Burgas and the Sunny Beach resort is the top source of tourism revenue for the country, there have been widespread concerns that an environmental disaster with the future pipeline would devastate Bulgaria's tourism industry.

"We have been living under stress for several years because of the unknown and the risks that would have come with the project. We have just evaded a great danger for the environment combined with unproven economic benefits from it," Nikolov elaborated.

"I myself had become very concerned because the project company Trans-Balkan Pipeline had hired elite experts in order to synchronize their entire documentation with the Bulgarian legislation, and because of that we could have ended up in an endless spiral of legal moves. I am happy that an end has been put to this project, and that we can now focus on the real perspectives for Burgas," stated the mayor of the fourth largest Bulgarian city.

Bulgaria, Greece and Russia agreed to build the pipeline between Burgas and Alexandroupolis, taking Caspian oil to the Mediterranean skirting the congested Bosphorus, in 2007 after more than a decade of intermittent talks.

The agreement for the Trans-Balkan Pipeline company which will construct the Burgas-Alexandroupolis oil transit pipeline was signed by Bulgaria during Russian President Putin's visit to Bulgaria in 2008.

The 280-km pipeline, with 166 km passing through Bulgaria, would have an initial annual capacity of 35 million tons of crude oil, which could be later expanded to 50 million tons. Its costs are estimated at up to USD 1.5 B, up from initial estimates at USD 900 M.

The Russian participant in the project, Pipeline Consortium Burgas-Alexandroupolis Ltd, has a share of 51%. It was founded jointly by three companies: AK Transneft (33.34%), NK Rosneft (33.33%), and Gazrpom Neft (33.33%).

The Bulgarian Joint stock company "Project Company Oil Pipeline Burgas-Alexandroupolis – BG" AD has a share of 24.5%. It was initially founded as jointly by two state companies, Bulgargaz (50%) and Technoexportstroy (50%) but was transferred in full to the Finance Ministry in February 2010.

The Greek participants are Helpe Thraki AE with 23.5% and the Greek government with 1%. The Helpe-Thraki AE was founded jointly by "Hellenic Petroleum" (25%) and "Thraki" (75%).

Three Bulgarian Black Sea municipalities - Burgas, Pomorie, and Sozopol - have voted against the pipe in local referendums over environmental concerns.